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What happens when a country stops adding bigger notes: the Lao kip since 2012

Adding a larger banknote looks like an administrative act. It is a government decision in Lao law, and the interesting cases are the ones where it is not taken. The top of the Lao ladder has not moved since 2012.

Reviewed by the Tradergy editorial team · September 2026
In short

The Lao kip ladder runs from 500 to 100,000, and the central bank's 2020 banknote regulation enumerates those eight denominations and stops. The 100,000 note entered general circulation in February 2012 and nothing larger has followed. Under the 2018 central bank law the Government approves denominations, so extending the ladder is its decision.

Extending a banknote ladder looks administrative. In Lao law it is a government decision, and Laos has not taken it since 2012. The kip ladder has eight rungs and the top one is the 100,000 note, and what has changed since is the value of that rung rather than its existence.

Key Takeaways

  • The Bank of the Lao PDR's 2020 banknote regulation enumerates eight denominations, from 500 kip to 100,000, and stops.
  • Denominations are designed by the Bank but approved by the Government.
  • The 100,000 note entered general circulation in February 2012, and the stated reason was currency substitution, not inflation.
  • No official statement explains why nothing larger has followed.
  • Foreign currency deposits have run near 70 per cent of the deposit base, which is the alternative to a bigger note.

Where the ladder stops, and how we know

From the issuer's own regulation, which had to list the denominations for a different purpose.

Decision No. 407/BOL of 10 July 2020, on the management of banknotes in circulation, was gazetted on 23 July 2020. Its article 8 governs carrying kip out of the country by capping how much of the amount may be made up of each denomination: not more than 60 per cent in 100,000 notes, 20 per cent in 50,000, 10 per cent in 20,000, 5 per cent in 10,000, 3.25 per cent in 5,000, 1 per cent in 2,000, 0.5 per cent in 1,000 and 0.25 per cent in 500.

That is an exhaustive list, written by the issuer for an operational purpose, and a rule allocating shares of a total across denominations cannot leave out the largest note.

Nothing above it exists elsewhere either. The Bank's own listing of instruments in the Lao Official Gazette contains nothing creating a new denomination, and BanknoteNews, which tracks world issues and is cited below, records no Lao issue above 100,000 and none forthcoming.

A 200,000 kip note is sometimes referred to and does not appear to exist. One likely explanation is linguistic: in Lao the words for a banknote and a bond differ by one syllable, and the Bank does issue savings bonds.

Who decides that a bigger note exists

The Government, on the Bank's proposal, and the split of responsibility is set out in statute.

The Law on the Bank of the Lao PDR, No. 47/NA, was adopted on 19 June 2018 and promulgated that September. Its article 33 provides that the Bank designs banknotes and coins and determines their composition, image and type, and submits them to the Government for consideration and approval. It also makes the Bank the sole printer of notes and minter of coins, and requires each note and coin to have its value clearly specified.

A separate provision splits the annual decision from the structural one. Under article 28, the Governor approves the quantity of notes and coins to be printed and issued, withdrawn and destroyed each year. So the Governor decides how much money is printed; the Government decides what denominations exist at all.

That distinction is what makes an unchanged ladder a decision rather than an omission. Printing volumes have been set every year. The set of denominations has not been added to.

The largest note was not issued because of inflation

This is the part that inverts the obvious reading.

A 100,000 kip note first appeared in November 2010 as a commemorative issue, marking the 450th anniversary of Vientiane as the capital and the 35th anniversary of the Lao PDR. The 2018 law now gives commemorative issues their own article, allowing them for celebrations of significant political, historical and cultural occasions with the Government's approval.

The general-circulation note followed. The Governor announced it on 25 January 2012 and it entered circulation on 1 February. The reason given was to encourage the public to use the national currency instead of US dollars or Thai baht.

That is a currency-substitution rationale, not a price one. The largest Lao note exists because people were transacting in somebody else's money, and a note large enough to be practical was one answer to that.

There was a contemporary objection from the other direction. Reporting the 2010 issue, an academic account recorded a Lao research institute telling the national newspaper that a shortage of low-denomination notes was pushing traders to price goods higher, partly to avoid giving change, and that officials rejected the concern on the ground that money in circulation would be unchanged.

What has happened to the ladder since

It has been reprinted, not extended.

The Bank ran an upgrade programme through 2022, announcing improved 10,000 and 20,000 kip notes in October and 50,000 and 100,000 in December, each entering circulation days later. The stated purpose was quality and security: better protection against counterfeiting, and denominations more easily told apart. The most recent recorded event of any kind is a 1,000 kip date variety confirmed in January 2024.

Every one of those actions kept the ladder the same shape. Four denominations were improved; none was added.

What the top rung is worth now

Less, and the scale of the change is documented.

The International Monetary Fund's 2025 Article IV consultation, published in February 2026, recorded a cumulative nominal wage increase of 2 per cent against 117 per cent inflation over 2021 to 2025. Annual average consumer price inflation over those years ran 3.8, 23.0, 31.2, 23.1 and 7.7 per cent on the same report's table.

A fixed ladder passing through that does not stay the same instrument. The top note buys what lower rungs used to, and every cash transaction needs more paper than it did.

What fills the gap instead

Foreign currency, and the deposit figures are unusually clear about it.

The World Bank's Lao PDR Economic Monitor of May 2025 described dollarisation as a structural feature of the Lao economy, reflecting persistent low confidence in the domestic currency, and reported foreign currency deposits at 69 per cent of broad money in 2024. The IMF's February 2026 report put foreign currency deposits at around 70 per cent of total deposits as at September 2025 and called dollarisation pervasive while moderating.

Those two figures use different denominators and are not the same measurement. What they agree on is direction and magnitude.

One further ratio makes the mechanism concrete. The IMF records the kip loan-to-deposit ratio above 100 per cent, with the foreign currency ratio far lower. Kip deposits are scarce relative to kip lending; foreign currency deposits are abundant relative to foreign currency lending. People are holding the other money.

That is the alternative to a larger note, and it is the same problem the 2012 note was issued to address.

Keeping the small notes working

The rulebook that results is detailed in a way a high-denomination system would not need to be.

Decision 407/BOL grades circulating notes into three fitness bands by how much of the note remains intact, and lists five categories of unfit note. It prohibits writing on notes, stamping, stapling or perforating them, requires notes to be accepted at full face value, and requires damaged notes to be exchanged free of charge at the Bank and at commercial bank branches nationwide. Press reporting in January 2026 described penalties taking effect the following month for deliberately damaging notes, and for a bank refusing to exchange a worn note or charging for it, with a note required to be at least half intact. The underlying instrument was not identified.

A duty on every bank branch to swap worn notes for nothing is what a system built around a large physical stock of low-value paper looks like.

The silence is the finding

There is no on-record refusal to print a bigger note.

No statement by the Bank of the Lao PDR or the Government explains why the ladder has not been extended past 100,000. Laos has made no argument either way in public.

The decision has been taken by not acting, repeatedly, over more than a decade. That is a normal way for a monetary decision to be made and an easy one to miss, because nothing is ever announced.

Where to look next

The AUD to LAK page carries the live reference rate and a short block on what Lao law lets a person hold, carry and convert. For the opposite decision, where a country removes zeros rather than adding a rung, why a country drops zeros from its money covers what a redenomination costs. For a country where foreign currency has become part of everyday domestic use, how a country uses two currencies at once sets that arrangement out. And for a redenomination that carried a cap on how much any household could convert, when a redenomination has a ceiling covers what that clause changes. The common thread is that a denomination ladder is a policy instrument, not a description of prices.

Sources

General information about how banknote denominations are decided. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.

Common questions

What is the largest Lao kip banknote?

The 100,000 kip note. The Bank of the Lao PDR's Decision No. 407/BOL of 10 July 2020 on the management of banknotes in circulation enumerates the denominations then circulating, from 500 kip up to 100,000 kip, and the list stops there. No instrument creating a larger denomination appears in the Lao Official Gazette, and the world banknote issue record cited in this guide shows no Lao issue above 100,000 kip.

Is there a 200,000 kip note?

No evidence of one exists in the issuer's gazetted instruments, in its own announcements, in the standard world banknote catalogue, or in the Lao or English press. One likely source of the confusion is that the Lao words for a banknote and for a bond differ by a single syllable, and the Bank does issue savings bonds.

Who decides whether a new denomination is created?

The Government. Under article 33 of the 2018 Law on the Bank of the Lao PDR, the Bank designs banknotes and coins and determines their composition, image and type, but submits them to the Government for consideration and approval. The Bank is the sole printer of notes and minter of coins, and the Governor separately approves the quantity to be printed, issued, withdrawn and destroyed each year.

Why was the 100,000 kip note introduced?

The reason given at the time was currency substitution rather than inflation. A commemorative 100,000 kip note was issued in November 2010 for the 450th anniversary of Vientiane as the capital and the 35th anniversary of the Lao PDR. When the Governor announced a general-circulation version in January 2012, the stated purpose was to encourage the public to use the national currency instead of US dollars or Thai baht.

What has replaced a larger note?

Foreign currency, on the evidence of the deposit figures. The World Bank reported foreign currency deposits at 69 per cent of broad money in 2024 and described dollarisation as a structural feature of the Lao economy. The IMF put foreign currency deposits at around 70 per cent of total deposits as at September 2025, and noted that the kip loan-to-deposit ratio sits above 100 per cent.